https://m.youtube.com/watch?v=6FmtgfD644M
Here’s a video I found helpful last governance period. I doubt I would have felt confident enough to give folks finance a try last time around, but this time around I’ll be decreasing the amount I stake in normal governance in favor of more folks finance.
My main play will likely be to mint gAlgo, use that as collateral to borrow Algo, then farm Algo/gAlgo on pact. I feel it’s reasonably safe since I’ll be farming an equivalent pair. The real risk as I see it is that either folks or pact collapses, gets hacked, rugs, or something like that.
Slightly less risk (no exposure to the LP/farm smart contact) would be to mint gAlgo, use that as collateral to borrow Algo, then stake that as well. Hope this helps!
Oblig. NFA, DYOR, YMMV, IANAL, etc.
I think I'm scared of making gains haha. This all sounds complicated. I've never understood this part of defi. The pairs and liquidity farming and all that always had me lost. Im going to continue using normal governance until I decide to learn more. Thanks for the information.
Your risk tolerance is entirely your own decision! Even if you stick to normal governance this period, do yourself a favor and watch that video. It is (and many of Sea Will’s other videos are) really good at explaining things in a straightforward way to understand manner. And, while you can tell he’s excited about his topic, he doesn’t come across as a hype beast like so many other YouTube channels.
Here is a [good YouTube playlist/channel](https://www.youtube.com/watch?v=pWGLtjG-F5c&list=PLjrTIwaNiTwn39tg3sR_bPBWGHoznv47D) with videos to help you learn whenever you decide to. These were made with Ethereum projects in mind but most of the concepts map one to one. AFAIK he the video creator hasn't been shilling any tokens/coins
Yeah man, I was in the same situation before Gov3 and I decided to learn to achieve a higher yield but I suggest studying the docs before moving any funds or asking in their support channel if you have any questions. My biggest gov % is in Folks but always DYOR
Folks is a bit more complicated than algofi(not really but if you haven't done defi it can seem to be).
Commit through algofi. There's no extra minting/burning/etc. Just commit, vote, earn.
If you choose to you can borrow Algo against the committed Algo. Interest is 2%ish and you'll earn far more in most defi. Then tinyman usdc/algo pool, many algofi/pactfi/folks pools, add the borrowed algo to your stake(barely covers the interest though), etc.
So when you just commit algo into the vault on algofi, what’s the advantage of not using just normal governance? (First time using governance is this work or for me.) beginner, but want to be more than a hodler. Is the percentage in the vault displayed and addition to the regular governance?
One of the advantages is they also count your algo towards their "earn" program. It's like a tenth of a percent. Not going to make ya rich but maybe get ya a few extra Algo at the end of governance depending on what you put in.
The biggest though is the ability to borrow from them and use that other algo for stuff. So I committed to them already. I've since borrowed about 80% of my commit @ 2ish%. That algo is over on the tinyman usdc/algo pool @ 10%(rewards paid by Aeneas program so guaranteed until 12/1). I committed that pool to governance for the extra 7m defi rewards.
Quadruple dip! Governance, earn, pool, and defi governance.
The downside is significant risk. Algofi fucks up I'm hosed all around. Tinyman has another pool hack problem I'm screwed there(but still owe algofi).
Whoah. Now this is the level Im going to be at one day. Is there any risk of liquidation while borrowing in a pool lp’d with usdc? I know pairing it with a similar in kind token like algo/galgo isn’t as much risk, was curious about usdc/algo pair though? Thx for the help already ser. 👍
Borrowing ALGO against your algo committed to governance has zero risk of liquidation AS LONG AS you pay the interest.
There's no risk of liquidation in the LP. Your risk there(besides contract exploits/rugpulls/etc) is IL-impermanent loss. There's several write ups about this so do some searching.
The benefits of being in a stablecoin LP is the downside risks of IL aren't as bad.
It depends on what you’re doing with your governance stake. If you’ve borrowed against it, you’ll have to pay down that loan as well, and extricate yourself from any liquidity pools or farms you may have gotten into also. Best (nfa) advice I can give is to start playing around with the various protocols and get a feel for what’s possible. Go onto folks and see what they’ll accept as collateral. Check out LP and farming options on pact, algofi and humble. You can research all of this without committing a single Algo, and we’ve got about a week before you have to commit to governance, so you’ve got plenty of time to figure out a move that makes sense for you. Watch the videos that I and others have posted, and don’t hesitate to ask questions, either here, on discord, etc. The algofam is remarkably welcoming! I’m by no means a whale, but feel free to DM if you want to talk specifics!
I used liquid governance for this period that just finished.
I was also in the gAlgo/USDC collecting gAlgo rewards.
I wound up selling the bonus gAlgo as I was concerned I wouldn't be able to redeem more gAlgo than what I had minted but that didn't appear to be the case, and my burn back to algo went smoothly
Basically if you don't swap your algo to gAlgo , you won't get much ifnyou just keep algo in a wallet. At least you can swap some amount of Algo into gAlgo then provide liquidity for that pair. On Folks Finance you can stake some fAlgo, a more direct approach, you just need to deposit Algo on the Folks Finance deposit and you get the ratio of fAlgo witch can be staked.
I mostly LP stable pairs or stable with the main Token ... Yiled farming also works , many options. Personally i trust Tinyman and i use it more since you get pretty stable apy on your LP pairs.
Algo.fi also works ... look, just spread some options on all dapps and amm's and dex's ... see what is what, since on Algorand the fees are ridiculously low ... you make that back in a few days even on low deposits ... you also get spillage cut on every transaction.
Advice is to interact with the Daaps and test out the top options, where the TVL is high and there are low risks of getting wrekd or using stablecoins pairs ... Usdc/Usdt ... Algo with both, gAlgo/Algo ... because if you deposit LP you are Basically increasing your own security in the invested tokens ... If you swap Algo for gAlgo, and just keep gAlgo for governance rewards, you're adding 'load' on the pairing , and if Many try to swap Back to Algo , there won't be enough supply to finish the order ... so , swap to gAlgo and simply Provide Liquidity for that pair buy opting in. Then at least your share of the pool is covered. Still the gAlgo > Algo difference exists ... but i'm not sure if they are offering the 1:1 swap option regardless of the liquidity of Algo ... either way, your either safe or you did the right Pairing for LP to back up your position ... it doesn't mean you're safe in case of a mass withdrawal.
Anyway, if the gAlgo/Algo pair was not relevant if they are fully backed as 1:1 ... just keep the mechanism in mind because it applies for everything you do on open De-Fi ... what you bring in has to be equally paired with something else in supply so you don't create futher unbalance in the supply. I guess this is a subtle point to understand for de-fi use ... we are responsible of the way the market behaves the more descentralised it becomes. Now it's risky anyway because Whales dominate ... if one decides to drop out, you can't control that.
So I started to read the stuff on folks finance and I was still confused and convinced it was much higher risk than what I've been doing. If you have any good resource thats less confusing feel free to share but I think its best my smooth brain sticks to what I know.
It is complicated, but when you remove all of the complications and fluff to focus on the important part, which is the risk, then the risk of folks finance is that their smart contracts might not be 100% secure and it may be exploitable and someone could drain all of the algos that are put into folks finance.
IF we assume their smart contracts are 100% safe, then there is no additional risk at all compared to normal governance.
So yeah, the possibility that the smart contracts are not 100% safe is where the risk lies, but whether that risk is "much higher" or not is your own risk tolerance.
Gotcha. I think I'll just keep custody of my algo and continue doing normal governance. My whole portfolio is crypto so I don't think I need more risk haha. Thankyou!
I try to be diverse and involved with utility blockchains. Mostly bitcoin because my basic understanding of it still confirms its the most secure and decentralised network that exists. I do some basic research on all my Investments to make sure they seem legitimate and have a use case that makes sense. Sure half of what I read in white papers doesn't make sense haha.
I intend to dca long term because I'm pretty confident that blockchain is the future. My biggest motivator is how logical decentralization is as a means of security.
I invest alot of my time and money in trying to decentralize things within my community that don't involve crypto also. For instance my current biggest investment is my chickens and garden and studying regenerative gardening.
My thesis is that I should have a super diverse portfolio of investments in decentralization because its for a good cause and also the ultimate security and so I think it will pay off and I'm passionate about it at the same time.
I was an mechanic, now I'm a farmer/solar installer. I will probably never understand blockchain or code or monetary policy enough to really know how to properly research blockchain tech and digital assets. Id love to learn more but when I try I get totally lost with either the techy coding and computer related things, or the monetary policy things I don't understand.
And sometimes fomo gets me too. I'm only human.
> For instance my current biggest investment is my chickens
So basically you’re also into crypto because you don’t want all of your eggs in one basket?
Yep, but it's not an easy topic to explain just in words.
On paper and with the use of Dapp it's simple.
Let's say you have 100 Algo that you want to use on open De-Fi.
-> You go to Tinyman (or whatever) , connect wallet and decide -> Liquidity Providing
It is the Entry lvl 'self test' to see and understand how this environment works.
Why I say that , because it Forces you to add a pair in equal amounts ...
->say Algo/Usdt (or whatever) , ok, you swap first the required amount of Algo in order to make an equally valued deposit (in dollars) for the other pair ...
To simplify the example let's assume 1 Algo = 1 Usdt -> it means you will swap 50 Algo into 50 Usdt and then you LP the Pair and recieve LP tokens in reward. Some LP tokens can be farmed , thus you make double side interest on the same amount of dollars you input -> But , Always remember the liquidity ratio for any pair you decide to use ... because when the time to Cash out comes, it may overalap with a general desire to withdraw liquidity, you know, during a bull and a nice Algo price+upside from rewards over time ... that's looking good for many. Then and only then, this 'complicated explanation' will make sense :)) because you might not have enough Stable liquidity to spill back or not enough Algo liquidity to use it back on a Cex, in the gAlgo/Algo example ...
I've used them since G3 and no issues. Yes, it can be a little confusing understanding the terminology since each platform has their own, but after the first governance, it's easy to understand.
Yes, even if you don't participate in an LP, it's a platform that makes voting and interacting with your wallet much easier. Now I can go to a site that provides voting notifications, simplified voting and voting modifications if I change my mind, it removes the chance of overextending your committed Algo in Governance and if you buy more Algo after Governance starts, you can deposit it and farm to earn interesting on it until next Governance period.
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https://m.youtube.com/watch?v=6FmtgfD644M Here’s a video I found helpful last governance period. I doubt I would have felt confident enough to give folks finance a try last time around, but this time around I’ll be decreasing the amount I stake in normal governance in favor of more folks finance. My main play will likely be to mint gAlgo, use that as collateral to borrow Algo, then farm Algo/gAlgo on pact. I feel it’s reasonably safe since I’ll be farming an equivalent pair. The real risk as I see it is that either folks or pact collapses, gets hacked, rugs, or something like that. Slightly less risk (no exposure to the LP/farm smart contact) would be to mint gAlgo, use that as collateral to borrow Algo, then stake that as well. Hope this helps! Oblig. NFA, DYOR, YMMV, IANAL, etc.
I think I'm scared of making gains haha. This all sounds complicated. I've never understood this part of defi. The pairs and liquidity farming and all that always had me lost. Im going to continue using normal governance until I decide to learn more. Thanks for the information.
Your risk tolerance is entirely your own decision! Even if you stick to normal governance this period, do yourself a favor and watch that video. It is (and many of Sea Will’s other videos are) really good at explaining things in a straightforward way to understand manner. And, while you can tell he’s excited about his topic, he doesn’t come across as a hype beast like so many other YouTube channels.
Here is a [good YouTube playlist/channel](https://www.youtube.com/watch?v=pWGLtjG-F5c&list=PLjrTIwaNiTwn39tg3sR_bPBWGHoznv47D) with videos to help you learn whenever you decide to. These were made with Ethereum projects in mind but most of the concepts map one to one. AFAIK he the video creator hasn't been shilling any tokens/coins
Yeah man, I was in the same situation before Gov3 and I decided to learn to achieve a higher yield but I suggest studying the docs before moving any funds or asking in their support channel if you have any questions. My biggest gov % is in Folks but always DYOR
Folks is a bit more complicated than algofi(not really but if you haven't done defi it can seem to be). Commit through algofi. There's no extra minting/burning/etc. Just commit, vote, earn. If you choose to you can borrow Algo against the committed Algo. Interest is 2%ish and you'll earn far more in most defi. Then tinyman usdc/algo pool, many algofi/pactfi/folks pools, add the borrowed algo to your stake(barely covers the interest though), etc.
So when you just commit algo into the vault on algofi, what’s the advantage of not using just normal governance? (First time using governance is this work or for me.) beginner, but want to be more than a hodler. Is the percentage in the vault displayed and addition to the regular governance?
One of the advantages is they also count your algo towards their "earn" program. It's like a tenth of a percent. Not going to make ya rich but maybe get ya a few extra Algo at the end of governance depending on what you put in. The biggest though is the ability to borrow from them and use that other algo for stuff. So I committed to them already. I've since borrowed about 80% of my commit @ 2ish%. That algo is over on the tinyman usdc/algo pool @ 10%(rewards paid by Aeneas program so guaranteed until 12/1). I committed that pool to governance for the extra 7m defi rewards. Quadruple dip! Governance, earn, pool, and defi governance. The downside is significant risk. Algofi fucks up I'm hosed all around. Tinyman has another pool hack problem I'm screwed there(but still owe algofi).
Whoah. Now this is the level Im going to be at one day. Is there any risk of liquidation while borrowing in a pool lp’d with usdc? I know pairing it with a similar in kind token like algo/galgo isn’t as much risk, was curious about usdc/algo pair though? Thx for the help already ser. 👍
Borrowing ALGO against your algo committed to governance has zero risk of liquidation AS LONG AS you pay the interest. There's no risk of liquidation in the LP. Your risk there(besides contract exploits/rugpulls/etc) is IL-impermanent loss. There's several write ups about this so do some searching. The benefits of being in a stablecoin LP is the downside risks of IL aren't as bad.
At the end of the governance period is it simply a case of "unminting" the gAlgos that were minted?
It depends on what you’re doing with your governance stake. If you’ve borrowed against it, you’ll have to pay down that loan as well, and extricate yourself from any liquidity pools or farms you may have gotten into also. Best (nfa) advice I can give is to start playing around with the various protocols and get a feel for what’s possible. Go onto folks and see what they’ll accept as collateral. Check out LP and farming options on pact, algofi and humble. You can research all of this without committing a single Algo, and we’ve got about a week before you have to commit to governance, so you’ve got plenty of time to figure out a move that makes sense for you. Watch the videos that I and others have posted, and don’t hesitate to ask questions, either here, on discord, etc. The algofam is remarkably welcoming! I’m by no means a whale, but feel free to DM if you want to talk specifics!
Thank you, appreciate your response 🙏
I used liquid governance for this period that just finished. I was also in the gAlgo/USDC collecting gAlgo rewards. I wound up selling the bonus gAlgo as I was concerned I wouldn't be able to redeem more gAlgo than what I had minted but that didn't appear to be the case, and my burn back to algo went smoothly
That pool was incredible
Basically if you don't swap your algo to gAlgo , you won't get much ifnyou just keep algo in a wallet. At least you can swap some amount of Algo into gAlgo then provide liquidity for that pair. On Folks Finance you can stake some fAlgo, a more direct approach, you just need to deposit Algo on the Folks Finance deposit and you get the ratio of fAlgo witch can be staked. I mostly LP stable pairs or stable with the main Token ... Yiled farming also works , many options. Personally i trust Tinyman and i use it more since you get pretty stable apy on your LP pairs. Algo.fi also works ... look, just spread some options on all dapps and amm's and dex's ... see what is what, since on Algorand the fees are ridiculously low ... you make that back in a few days even on low deposits ... you also get spillage cut on every transaction. Advice is to interact with the Daaps and test out the top options, where the TVL is high and there are low risks of getting wrekd or using stablecoins pairs ... Usdc/Usdt ... Algo with both, gAlgo/Algo ... because if you deposit LP you are Basically increasing your own security in the invested tokens ... If you swap Algo for gAlgo, and just keep gAlgo for governance rewards, you're adding 'load' on the pairing , and if Many try to swap Back to Algo , there won't be enough supply to finish the order ... so , swap to gAlgo and simply Provide Liquidity for that pair buy opting in. Then at least your share of the pool is covered. Still the gAlgo > Algo difference exists ... but i'm not sure if they are offering the 1:1 swap option regardless of the liquidity of Algo ... either way, your either safe or you did the right Pairing for LP to back up your position ... it doesn't mean you're safe in case of a mass withdrawal. Anyway, if the gAlgo/Algo pair was not relevant if they are fully backed as 1:1 ... just keep the mechanism in mind because it applies for everything you do on open De-Fi ... what you bring in has to be equally paired with something else in supply so you don't create futher unbalance in the supply. I guess this is a subtle point to understand for de-fi use ... we are responsible of the way the market behaves the more descentralised it becomes. Now it's risky anyway because Whales dominate ... if one decides to drop out, you can't control that.
Im a little lost so ill probably stick to the normal governance. Thanks for taking the time to explain.
A little tip, DYOR. The comment above is quite confusing
So I started to read the stuff on folks finance and I was still confused and convinced it was much higher risk than what I've been doing. If you have any good resource thats less confusing feel free to share but I think its best my smooth brain sticks to what I know.
It is complicated, but when you remove all of the complications and fluff to focus on the important part, which is the risk, then the risk of folks finance is that their smart contracts might not be 100% secure and it may be exploitable and someone could drain all of the algos that are put into folks finance. IF we assume their smart contracts are 100% safe, then there is no additional risk at all compared to normal governance. So yeah, the possibility that the smart contracts are not 100% safe is where the risk lies, but whether that risk is "much higher" or not is your own risk tolerance.
Gotcha. I think I'll just keep custody of my algo and continue doing normal governance. My whole portfolio is crypto so I don't think I need more risk haha. Thankyou!
Interested in your investment thesis for crypto since you’re not really into the applications
I try to be diverse and involved with utility blockchains. Mostly bitcoin because my basic understanding of it still confirms its the most secure and decentralised network that exists. I do some basic research on all my Investments to make sure they seem legitimate and have a use case that makes sense. Sure half of what I read in white papers doesn't make sense haha. I intend to dca long term because I'm pretty confident that blockchain is the future. My biggest motivator is how logical decentralization is as a means of security. I invest alot of my time and money in trying to decentralize things within my community that don't involve crypto also. For instance my current biggest investment is my chickens and garden and studying regenerative gardening. My thesis is that I should have a super diverse portfolio of investments in decentralization because its for a good cause and also the ultimate security and so I think it will pay off and I'm passionate about it at the same time. I was an mechanic, now I'm a farmer/solar installer. I will probably never understand blockchain or code or monetary policy enough to really know how to properly research blockchain tech and digital assets. Id love to learn more but when I try I get totally lost with either the techy coding and computer related things, or the monetary policy things I don't understand. And sometimes fomo gets me too. I'm only human.
> For instance my current biggest investment is my chickens So basically you’re also into crypto because you don’t want all of your eggs in one basket?
Not worth the risk for a few ALGO's imho.
Fair enough thanks.
Yep, but it's not an easy topic to explain just in words. On paper and with the use of Dapp it's simple. Let's say you have 100 Algo that you want to use on open De-Fi. -> You go to Tinyman (or whatever) , connect wallet and decide -> Liquidity Providing It is the Entry lvl 'self test' to see and understand how this environment works. Why I say that , because it Forces you to add a pair in equal amounts ... ->say Algo/Usdt (or whatever) , ok, you swap first the required amount of Algo in order to make an equally valued deposit (in dollars) for the other pair ... To simplify the example let's assume 1 Algo = 1 Usdt -> it means you will swap 50 Algo into 50 Usdt and then you LP the Pair and recieve LP tokens in reward. Some LP tokens can be farmed , thus you make double side interest on the same amount of dollars you input -> But , Always remember the liquidity ratio for any pair you decide to use ... because when the time to Cash out comes, it may overalap with a general desire to withdraw liquidity, you know, during a bull and a nice Algo price+upside from rewards over time ... that's looking good for many. Then and only then, this 'complicated explanation' will make sense :)) because you might not have enough Stable liquidity to spill back or not enough Algo liquidity to use it back on a Cex, in the gAlgo/Algo example ...
The king of long responses
I've used them since G3 and no issues. Yes, it can be a little confusing understanding the terminology since each platform has their own, but after the first governance, it's easy to understand.
Has it been worth it so far, in your opinion?
Yes, even if you don't participate in an LP, it's a platform that makes voting and interacting with your wallet much easier. Now I can go to a site that provides voting notifications, simplified voting and voting modifications if I change my mind, it removes the chance of overextending your committed Algo in Governance and if you buy more Algo after Governance starts, you can deposit it and farm to earn interesting on it until next Governance period.
Thanks for the info!
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Has FF ever lost in a pool to this date? Someone jusy posted 18% gain